Predicting Customer Satisfaction towards Mobile Value-Added Services: An Application of Multiple Regression

By Jasrai, Lokesh | IUP Journal of Marketing Management, February 2014 | Go to article overview

Predicting Customer Satisfaction towards Mobile Value-Added Services: An Application of Multiple Regression


Jasrai, Lokesh, IUP Journal of Marketing Management


Introduction

The Indian mobile market is one of the fastest growing markets and is forecasted to reach 868.47 million users by 2013 as the number of wireless subscribers rose from 261.07 million in 2005 to 584.32 million in 2007 (Telecom Regulator y Authority of India - TRAI Annual Report, 2011). The overall growth rate in teledensity also rose from 7% in 2003 to 53% in 2010. In spite of the robust growth seen in the Indian telecom industry in the last two decades, the industry has been facing a sluggish growth for the last five years due to decline in Minutes of Use per connection per month (MOU) and Average Revenue Per User per month (ARPU). The MOU went down from 465 minutes in 2007 to 369 minutes in 2010, whereas ARPU declined from 362 in 2005 to 100 in 2011 for Global System for Mobile Communications (GSM) and from 256 to 66 for Code Division Multiple Access (CDMA) (Cellular Operators Association of India - COAI Report, 2011). Intense competition among the major telecom operators in the country has led to a fall in the voice tariffs and consequently resulted in lowering of the revenues of telecom market (Chen and Cheng, 2010). At a time when the industry is facing a steep fall in voice tariffs, Mobile Value-Added Services (MVAS) are considered as growth drivers, source of revenue and key differentiators (Kuo and Chen, 2006). Hence, it is imperative for marketers to analyze customers' preferences and satisfaction of MVAS, as they have a huge impact on the customers' usage pattern, and open a pathway for service providers to become significant differentiators across the operators by inculcating innovation in services. The Indian MVAS are forecasted to reach 48,000 crores by 2015 with an annual growth rate of 28%, from the current size of 12,000 crores (ASSOCHAM, 2011). Trends in mobile phone penetration, continuous growth in teledensity, need for differentiations in telecom services, increasing consumer demand and awareness, and advances in information and communication technology act as drivers for uninterrupted growth of MVAS in the country. High quality Value-Added Services (VAS) should be contemplated by marketers by analyzing customer satisfaction and preferences with an aim to sustain profitability in the telecom sector in a highly competitive scenario (Chen and Aritejo, 2008).

The present study aims to predict the CS for MVAS. On the basis of the most relevant literature, M-Commerce, M-Education, M-Health and M-Entertainment have been identified as the main determinants of VAS in mobile telecommunication that affect customer satisfaction. These four determinants have also been used as specific constructs for the study (Nokia Telecommunication Market Study Report, 1999; and PwC Report, 2011).

Literature Review

MVAS refers to additional services provided by the telecom operators excluding voice communication that allow customers to get entertained and informed through their mobile phones. The VAS in mobile telecom are in the form of voice mail, digital or any other method that is directly or indirectly paid by the end-users. It creates a win-win situation for both customers and service providers as customers are benefitted from digital empowerment and gain functional and hedonic utility, while service providers get a source of non-voice revenue. Present literature mentioned in the study is based on the most relevant studies and divided into two parts: (1) Categorization of MVAS enlisting the main activities; and (2) Effects of VAS on customer satisfaction.

Categories of MVAS

VAS are cate go riz ed o n t he basis of inf or ma tion, ap plication and ena bl eme n t (ASSOCHAM, 2011); entertainment, communication, and M-commerce (PwC Report, 2011); and on the ba sis of infotainment a nd transactional services (Nokia Telecommunication Market Study Report, 1999). The following categories of VAS were identified along with their respective activities:

M-Commerce

M-Commerce includes the services that facilitate transactions from mobile phone. …

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